DIRECTORS7 REPORT Dear Members, The Directors of your Company have pleasure in presenting Annual Report together with the Audited Accounts and Auditors' Report for the year ended 31st March, 2015 2. Dividend:- Your Directors are pleased to recommend for approval of Shareholders, a maiden dividend of Rs. 0.10 per share (i.e. 5%) on Equity Shares of the face value of Rs. 2/- each. 3. State of the Company's Affairs:- The gross turnover for the financial year 2015 at Rs. 3286.40 Lakhs and last year 2014 it was Rs. 915.46 Lakhs.The Profit before tax for FY 2015 was Rs. 123.19 Lakhs against as Rs. 114.53 Lakhs in FY-2014an increase of 7.57% over the previous year. The Profit after tax for FY 2015 was Rs. 102.14 Lakhs compared as Rs. 95.09 Lakhs in FY-2014 an increase of 7.41% over tire previous year. This has come due to company's health interest margins, operating efficiencies and prudent risk management. The Company's current provisioning standards are more stringent than Reserve Bank of India (RBI) prudential norms. In line with its conservative approach, the Company continues to strengthen its provisioning norms beyond the RBI regulation by accelerating the provisioning to an early stage of delinquencies based on the past experience and emerging trends. 4. Directors:- Pursuant to Sections 149 of the Companies Act, 2013 Mr. Dinesh Kumar Gupta, Mr. GajananUttamraoMante and Mr. SopanVishwanathraoKshirsagar, have been appointed as Independent Directors for a period of five years till 31st March, 2019 at the annual general meeting held on 29th September, 2014. Mr. Dinesh Kumar Gupta, Mr. GajananUttamraoMante and Mr. SopanVishwanathrao who are independent directors, have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect their status as independent director during the year. In the opinion of the Board, the independent directors possess appropriate balance of skills, experience and knowledge, as required. Mrs. CA. GazalaKolsawala was appointed as an Additional Director with effect from 25th March, 2015. The Board has appointed her as an executive director from the same date for a period of 3 years. She is a Chartered Accountant (Membership no: 047323) having 20 years of experience in finance, taxation, compliance, audits. She is a woman who is result oriented and the Company will be benefitted from her great potential in tire above fields. The resolution seeking approval of the members for the appointment of Mrs. CA Gazala Kolsawala have been incorporated in the notice of the forthcoming annual general meeting of the Company along with brief details about them. The brief note on Director retiring by rotation and eligible for re- appointment as well as Independent Directors and Additional Director being appointed is being furnished in the Report on Corporate Governance. 5. Key Managerial Personnel During the year under the report, the Company has appointed following persons as Key Managerial Personnel. Mr. MahendraprasadMallawat - Whole Time Director Mr. PrasenjitGoswami-Whole Time Director Mrs. CA. GazalaKolsawala-Whole Time Director Mrs. SoniyaAgarwal - Company Secretary and Compliance Officer. 6. Directors' Responsibility Statement:- Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed:- i) That in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review; iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) That the Directors have prepared the annual accounts for the financial year ended 31st March 2015 on a going concern basis. v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 7. No. of Board Meetings Eleven meetings of the Board were held during the year. For details of the meetings of the board please refer to the corporate governance report which forms the part of this report. 8. Board Evaluation The Nomination and Remuneration Committees lays down the criteria for performance evaluation of independent directors, Board of Directors and Committees of the Board. The criteria for the performance evaluation is based on the various parameters like attendance and participation at the meetings of the Board and Committees thereof, contribution to strategic decision making, review of risk assessment and risk mitigation, review of financial statements, business performance and contribution to the enhancement of brand image of the Company. The Board has carried out the evaluation of its own performance as well as that of the Committees of the Board and all the Directors. 9. Policy on Director's Appointment and Remuneration and Other Details: The Nomination and Remuneration Committees lays down the criteria for Director's appointment and remuneration including criteria for determining qualification, positive attributes and independence of the Director. The following attributes/criteria for selection have been laid by the Board on the recommendation of the Committee: « The candidate should posses the positive attributes such as Leadership, Entrepreneurship, Business Advisor or such other attributes which in the opinion of the Committee are in the interest of the Company. • The candidate should be free from any disqualifications as provided under Section 164 and 167 of the Companies Act, 2013. • The candidate should meet the conditions of being independent as stipulated under the Companies Act, 2013 and Listing Agreement entered into with Stock Exchanges, in case of appointment of an independent director; and • The candidate should posses appropriate educational qualification, skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations, infrastructure, medical, social service, professional teaching or such other areas or disciplines which are relevant for the Company's business. 10. Internal financial control systems and their adequacy:- The details in respect of internal financial control and their adequacy are included in the Management Discussion & analysis, which forms part of this report. 11. Audit Committee The details pertaining to composition of audit committee are included in the Corporate Governance, which forms the part of this report. 12. Auditors& Auditors Report The statutory auditors of the company M/S JAIN PRADEEP & CO, Chartered Accountants, retire at the conclusion of this Annual General Meeting of the company and being eligible for Re- Appointment offer them for reappointment. The Company has received a letter from them to the effect that their re- appointment, if made, would be within the limits prescribed under Section 141(3) (g) of the Companies Act, 2013 and they are not disqualified for re- appointment. The Notes on Financial Statements referred to in the Auditors' Report are self- explanatory and do not call for any further comments. The Audit report does not contain any qualification, reservations or adverse remarks. 13. Credit Ratings: Due to economic environment, the Company is under- going the process of acquiring the credit rating owing to high capital adequacy, strong promoter support, and robust asset liability management. Care Rating (the credit rating agency) is conducting tire process of rating tire Company, as these ratings indicate highest degree of safety with regard to timely payment of interest and principal 14. Share Capital During Financial Year 2014-2015, the Company has undergone the process of sub- division of share from Rs. 10/- per share to Rs. 2/- per share with effect from 18th April, 2015. 15. Management's Discussion and Analysis Report:- A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management's Discussion and Analysis Report, which forms part of this Report as Annexure I. 16. Corporate Governance:- We adhere to the principal of Corporate Governance mandated by the Securities and Exchange Board of India (SEBI) and have implemented all tire prescribed stipulations. As required by Clause 49 of the Listing Agreement, a detailed report on Corporate Governance forms part of this Report. The Auditors' Certificate on compliance with Corporate Governance requirements by the Company is attached with the Corporate Governance Report as Annexure II. 17. Secretarial auditor report: The secretarial report does not contain any qualification, reservations or adverse remarks. Report of the Secretarial auditor is given as an Annexure III which forms the part of this report. 18. Risk Management. Pursuant to tire Section 134 of the Companies Act, 2013, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are provided in the Report on Corporate Governance. 19. Particulars of Loans, Guarantees and Investment. The Company has not given any loans or guarantee or made any investments in contravention of the provisions of the Section 186 of the Companies Act, 2013. The details of the loans and guarantees given and investments made by the Company are provided in the notes to the financial statements. 20. Related Party Transactions. All the related party transaction entered into during the financial year was not on the arm's length basis and were in the ordinary course of Company's business. The Company's has not entered into any contracts, arrangements or transaction with any related party which could be considered as material within the meaning of clause 49 of the listing agreement. All the related party transactions are placed before the Audit Committee as well as the Board for approval on the quarterly basis. Omnibus approval was also obtained from the Audit Committee and the Board on an annual basis for repetitive transactions. Related party transactions under Accounting Standards AS- 18 are disclosed in the notes to the financial statements. Prescribed Form No. AOC- 2 pursuant to clause (h) of sub- section (3) of Section 134 of the Act and Rule 8(2) of tire Companies (Accounts)Rules, 2014 is furnished as Annexure IV to this report. Disclosure of Related Party/ Related Party Transactions: a) Key Managerial Persons: Mr. MahendraprasadMallawat Mr. PrasenjitGoswami Mr. Dinesh Kumar Gupta Mr. GajananUttamraoMante Dr. SopanVishwanathraoKshirsagar Mrs. CA. GazalaKolsawala Mrs. SoniyaAgarwal RBI guidelines The Company is registered with RBI. The Company has complied with and continues tocomply with all applicable Laws, Rules, Circulars, Regulations, norms and standards laid down by the Reserve Bank of India (RBI) during the Financial Year 2014-2015. In line with the RBI guidelines for asset liability management (ALM) system for NBFCs, the Company has an Asset Liability Committee which meets monthly to review its ALM risks and opportunities. 22. Secretarial standards of ICSI: The Institute of Company Secretaries of India (ICSI) has on 23 April 2015, notified the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) to be effective from 1 July 2015. The Company is complying with the same. 23. Extract of Annual Report: In accordance with the requirements of Section 92(3) of the Companies Act, 2013, and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT- 9 is furnished as Annexure V to this report. 24. Particulates of Employees:- None of the employees were in tire category of the limits specified Section 197 of tire Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 25. Fixed Deposits:- During the year under review, the Company has not accepted any deposits as such no amount of principal or interest on deposits from public was outstanding as on the date of tire balance sheet. 26. Conservation of energy, technology absorption and foreign exchange earnings and outgo:- The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be furnished pursuant to Sectioir 134 of the Companies Act, 2013, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are as under: (i) Part A and B of the Rules, pertaining to conservation of energy and technology absorption, are not applicable to the Company. (ii) Foreign Exchange Earnings and Outgo: Foreign Exchange Earned - Rs. Nil Foreign Exchange Used - Rs. Nil 27. Appointment of Internal Auditor Pursuant to the provisions of Section 138 read with Rule 13 of the Companies (Accounts) Rule, 2014, Mrs. Soniya Agarwal who is the Company Secretary and compliance officer of the Company has been appointed has the internal auditor of the Company for the financial year 2015-2016 and she is being eligible for re- appointment. 28. Human Resources: The Company recognizes people as its most valuable asset and it has built an open, transparent and meritocratic culture to nurture this asset. The Company has a planning tool that provides an integrated means of identifying, selecting, developing and retaining top talent within the organization. Focus on Behavioral and Leadership traits through Learning & Development interventions, job rotation is planned for the employees who constitute tire Talent Pool. 29. Business Development: During the year, the Business Development Group ("BDG") initiated opportunities and harnessed its extensive relationship network within and outside the Company, to benefit the business. 30. Regulatory Action: There are no significant and material orders passed by the regulators or courts or tribunal impacting the going concern status and operation of the Company in future. 29. Acknowledgrnents:- Your Directors acknowledge the support and owe a debt of gratitude to the Shareholders, Investors & Bankers. Your Directors are also thankful to its clients for their continued faith and support reposed in us. Last but not the least, your Directors, places on record their sense of appreciation of the valuable contribution made by the employees of the Company. On behalf of the Board of Directors For Arnold Holdings Limited For Arnold Holdings Limited Mahendraprasad Mallawat GazalaKolsawala Whole time Director Director DIN- 00720282 DIN: 07133943 PIace:-Kolkata Date: 29th day of May, 2015 |